Yahoo's record investment into China

As a sign of times, Yahoo reports that it wants to purchase an approximately 35% stake in China's biggest homegrown e-commerce company Alibaba.com for almost US$1 billion, in what would be the biggest investment by a foreign company in China's Internet industry to date. This investment clearly underlines the tremendous potential that China has for e-commerce companies, but also hightlights the competitive forces at play.

Alibaba operates two online business sites--Taobao.com, an online auction site, and Alibaba.com, an online trading site.

"An agreement between Yahoo! and Alibaba would be a setback for eBay, which has been expanding its investments in China's online auction business and had been seen as interested in partnering with Alibaba."

(By Asia Business Consulting)